Michigan Liquor License Transfer When You Sell

Michigan Lets Licenses Move

Some states make a buyer apply for a brand new license. Michigan works differently. An existing license can be transferred to a new owner, which is why a license often adds real value to a bar, restaurant or store.

The catch is approval. Any transfer of a Michigan liquor license goes through the Michigan Liquor Control Commission, and nothing is final until it signs off.

What the Buyer Files

The buyer applies for the transfer. The Commission asks for an executed purchase agreement or other document showing the deal. It also looks at who the new owners are.

Anyone who will hold 10 percent or more of the license and isn't already licensed by the Commission must be fingerprinted. Licensing and permit fees apply too.

The Commission can send the application to its Enforcement Division for an investigation. That review takes time, and the buyer has to cooperate fully.

Local Approval Varies

For a transfer of an existing license, state rules have not required the local government to approve it the way they do for a brand new license.

That does not mean your city stays out of it. Some cities have their own liquor ordinances. Novi, for example, has had its city council review transfers, often on the condition that building, police and fire inspections are finished.

Ask your attorney what your city expects. It can add weeks.

Escrow and Timing

Because approval is not guaranteed, purchase agreements usually make closing depend on it. Money for the license, and often for the whole deal, sits in escrow until the transfer is approved.

If the deal falls apart, the escrow terms decide who gets what. Your attorney writes those terms. A broker who has handled restaurant sales will know what is normal.

If you stop operating first

Some owners close before they find a buyer. A license that is not being used can be placed in escrow with the Commission, which keeps it alive for a time instead of losing it. Ask about this before you lock the doors.

Getting Ready Before You List

A few things make the transfer go faster. Gather them before a buyer is even in the picture.

• A copy of your current license and any permits attached to it
• Your history of violations, if any, and how each was resolved
• The lease, since the license is usually tied to the address
• Any local approvals you received when you first got the license

Buyers who see these organized up front feel better about the timeline. Lenders do too.

What Buyers Check About the License

• The exact license type and what it allows
• Any violations or open matters with the Commission
• Whether the license is tied to this location
• Permits attached to it, like entertainment or outdoor service

A clean history makes the transfer smoother and protects your price. A recent violation can slow approval or scare a lender.

Keep running the place carefully while the deal is pending. A violation during the transfer review is the last thing anyone needs.

Other Licenses Don't Move

Your liquor license may transfer, but most other permits will not. Food service licenses and city business licenses are usually issued to the new owner on its own application, sometimes after an inspection.

The buyer will also want proof that your state taxes are paid before releasing money. See the Form 5156 tax clearance guide.

Who This Affects

Bars, restaurants, party stores and pizzerias with beer and wine all deal with this. If you own a pizza place, our page on selling a pizzeria covers the rest of what buyers ask.

We are not listing fees, forms or processing times here, because they change. Check with the Commission or your attorney for current details. Everything above applies to Michigan licenses only.

Want to know what your place could sell for? Send the short form or call (313) 555-0152. The full process is on our how a sale works page.